Why Reliance Infra Stock Hit 20% Lower Circuit?

Reliance Infrastructure stock price hit 20 percent lower circuit in the afternoon session on April 10, 2024 after the Supreme Court ordered the company’s airport metro arm to refund arbitral award payments made by the Delhi Metro Rail Corporation (DMRC).

DMRC’s curative petition was accepted by the Supreme Court, which overturned its earlier ruling stating that the public transporter was liable to pay about Rs 8,000 crore to Delhi Airport Metro Express Pvt Ltd (DAMEPL), according to a moneycontrol report.

The bench, comprising Chief Justice of India DY Chandrachud, Justices BR Gavai, and Surya Kant, directed the Reliance Infra unit to refund the money deposited by DMRC.

The case stems from DMRC not paying termination fees to DAMEPL, a company owned by Anil Ambani’s Reliance Infrastructure. DMRC had terminated a contract to run the airport metro line in the national capital. But it continued using the project’s assets and revenues since July 2013.

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An arbitration panel favored DAMEPL, ordering DMRC to pay Rs 2782.33 crore plus interest. The award was upheld by the Delhi High Court and then the Supreme Court.

As of February 14, 2022, DMRC had paid Rs 1,678.42 crore of the outstanding amount, leaving Rs 8009.38 crore in dues. By February 2023, the pending amount was reduced to Rs 6330.96 crore.

The 2021 Supreme Court order was challenged by DMRC’s curative petition.

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